017 The Free Yearly Checkup That Saves You Money - Get Out of Debt, Save More Money, and Retire Early | Scott Alan Turner

017 The Free Yearly Checkup That Saves You Money

By Scott Alan Turner

Dec 04

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What you missed

In the last episode I explained how you can manage your budget when you have an inconsistent income.

Topics and your questions answered on the show

  • Where to get free credit reports
  • Husband wants separate checking account
  • Lower closing costs on refi
  • How to choose a credit card
  • Do you need a will
  • Single mom saving money
  • Tax benefits of owning a company
  • Struggle with work-life balance
  • How to give up instant gratification

Links mentioned in the show

Read the Transcript

You can download a complete, word-for-word transcript of this episode here or click the toggle button to read online.

[mks_toggle title=”Full Transcript – Click to show”] [0:00:11] ST: Welcome Rock Star Nation to the Financial Rock Star Show. I’m your host Scott Alan Turner, ready to help you to get out of debt, save more money and retire early. In the studio with me is Producer Katie who sometimes drinks before five PM.

On the show today we’ll be answering your questions about money, business and life. If you have a question you’d like answered on the show, visit GoAskScott.com. On the last show, I gave you some tips on how to budget on an inconsistent income. If you are a sales person or a seasonal worker who has fluctuating income, be sure to check that show out.

What do the following things have in common? Taking out a mortgage, applying for auto insurance, getting a car loan, applying for a job, we all do that right? Getting an apartment, signing up for a credit card. The answer is, they all require a credit check, they all require the credit issuer, the loan under writer, the potential employer to see if you are worthy. Are you worthy?

One out of every three people have never checked their credit report or credit score. And a quarter of people haven’t bothered to check their credit report or credit scores in the past 12 months. You can save money by making sure there are no errors on your credit report that are lowering your credit score. Federal law requires you to get a free copy of your credit report every 12 months from each credit reporting agency, TransUnion, Equifax, and Experian.

Get a credit core report every year and check it for accuracy because it’s free. You can get a free credit report by visiting AnnualCreditReport.com. AnnualCreditReport.com is authorized by a federal law and made available by the government and it’s 100% free. It is a legit website. You will be asked for your social security number, that’s okay, it’s secure. Well, yeah, it’s secure. It’s hard to say that about a government website but yea, they claim it’s secure. I’ve used it before so don’t worry about it. If you don’t want to share your social security number online, you can call 877-322-8228 or you can mail in your request.

When you request your annual credit report, you will be inundated with all kinds of ads and popups for stuff you don’t need. Offers for credit monitoring, credit cards, you name it. Don’t fall for any of this junk, stick to getting your free credit report. Make a note on your digital calendar if you use one to get a copy of your credit reports once every 12 months. Just pick the day you’re supposed to do all the other stuff you forget to do, like changing the batteries in the smoke detectors and the air filters in your house. It’s important to keep up with your credit report just for the simple fact that it might save you money and help you if you’re changing jobs.

Now on to your questions. Diana has been married for a year, she and her husband still have separate finances, separate checking accounts, separate savings account. Diana wants to combine their finances but her husband isn’t interested. She asks:

[0:03:12] D: “How do I get my husband on board?”

[0:03:14] ST: So right before I got married, I bought an expensive guitar because I knew after the wedding day, I wasn’t going to have any money anymore. It was going to be our money. I couldn’t just run out and buy expensive guitars anymore without asking first. I guess there is a negative to getting married, one marriage, one set of shared accounts. Don’t have a plan for divorce when you enter marriage, that’s a sure fire way to make sure it happens. If you want to have a great marriage, every part of your marriage needs to be great. Great communication, great understanding, great patience and great handling of money.

You can’t have one person ruling with an iron fist and the other person be a subordinate or treated like an employee. You have to be equals, equals that make decisions together. Doesn’t mean you’re always going to agree, it would be great if that happened, probably a little boring but it never works out that way. Everybody needs to be heard, everybody needs to have a say. If you’re a man and you want your wife to think you’re a big jerk and resent you, try ruling with an iron fist, try telling her what she can and can’t spend money on, try being tight with the purse strings and see where that gets you.

Your marriage is going to suck and you’re going to come home one day to an empty house and like a dumb fool, wondered, “What has happened?” Get your head out of the sand and pay attention to each other’s needs. We sit down in our house and discuss our goals and long term plans and then we work towards them. “Oh Scott, he doesn’t want to do that, he’s stubborn,” that’s what some of you are thinking. Hey, a kick in the pants is a, “Hey Jack wagon, there’s a new sheriff in town.” Actually, that’s not going to work.

But if you sit down and say, “Oh honey pooh bear, schmooky,” or whatever you want to call him, “The situation needs to change, it is upsetting to me.” And gentleman, hear me on this, you can’t argue feelings. I’ve told my friends this and they’ve agreed with it. Nobody ever argued someone out of being upset. Combining accounts, it’s really not that big of a deal. I don’t understand why married people can be so reluctant to do it. His, hers and ours, his credit card, her credit card, our credit cards, his checking account, her checking account, our checking account, his life, her life, our life.

You get married for life! Having separate lives makes you nothing more than roommates, it’s a recipe for financial ruin which is the precursor for divorce. If you’ve tried repeatedly and get no movement then something deeper is going on. It’s time to get some outside help to find out what the bigger issue is and reasons might be as to the reluctance. Marriage is a team sport, don’t be afraid to get some coaching to sort out the issues, you want to win together, not have your own individual ideas as to how to play the game. Thanks Diana.

Charles is refinancing his mortgage:

[0:05:52] C: “How can I decrease the closing costs on a re-fi?”

[0:05:55] ST: So here’s some tips to refinancing if you want to get the best deal. Number one, shop at least three lenders. Most people don’t’ even do this part, it is shop one. You want to check out your local credit union, if you’re not a member of a credit union, look online, it’s pretty easy to become a member of one. Check out BankRate.com and find a couple of loans there that you can apply for and see what kind of rates you can get.

Oh the cat is making an appearance, we’re not going to edit that out, this is a real show. I don’t know if you can hear him or not. We’re at the home office today. Jake the cat says, “Hello.” Totally unprofessional around here.

Next, you want a good faith estimate, want to figure out the fees that associate with that loan from that good faith estimate. You want that to include the origination, the points, the appraisal, the underwriting, the credit and the application fees. You want to be able to compare the interest rate and the loan terms. How much funds you’re going to have to borrow to close? That’s a line item that you’re going to see in that GFE. Annual percentage rate is the most important. Interest rate you want to compare between these three lenders and their proposals.

Then it’s time to negotiate, negotiate your appraisal fees, negotiate your credit report fees, negotiate those printing fees which are, they’re just junk fees, It’s the assistant to the other assistant who goes and presses print on the printer for 10 sheets of paper and you get charged 50 bucks for it where they drop something in the mail next to their desks and they’re going to charge you $75 for that. It’s ridiculous. Those are negotiable fees.

Finally, review the final statement before your closing date and compare the good faith estimate you received for any changes, make sure it’s accurate. Those are the best ways to decrease your closing cost on a refinance, good luck Charles and thanks for the question.

Mark writes in:

[0:07:51] M: “No debt here, no mortgage, no kids, no ex-wife and no car payment. That said I’m looking to get a credit card again, settle on a few accounts in the past and pay them off to an agreed upon amount and close the account. Last time that occurred it was approximately 2005, I’ve been using a debit card since. My credit reading was lame last time, I had someone inquire, in fact I had a recommended trustworthy mortgage broker run a report on me upon request. Then came back saying either I have no credit or he couldn’t find me. I gave him whatever info he needed to make sure he was seeking the right report for the right person and no luck. Step one, get my three main credit reports run and look for errors, et cetera after I get my credit report sorted, how should I go about applying for and choosing a credit card?”

[0:08:39] ST: Well first Mark, congratulations for being out of debt! That is totally awesome, good job on that. If you’re looking for a credit card, the best place to see how to maximize your rewards is CreditCardTuneup.com. That’s a website you can input your spending habits and will recommend the best cards to maximize your rewards. Now if you choose to go with multiple credit cards, there’s an app I want you to check out, it’s called Walla.by – Wallaby. I’ll put that link in the show notes. You use this app based on what you are purchasing, the app will tell you which of your existing credit cards to use to maximize your rewards.

You’re in the checkout line, use the app, say, “Here’s what I’m buying.” In the general categories it will say, “You should use the MX Blue card, or you should use your Capital One venture card,” depending on where you are. A lot of people do like the blue card for Amex, which will be one of those options on creditcardtuneup.com. Blue gives 6% back on groceries, doesn’t work at the warehouse clubs though, so no benefits for you Costco, Sam’s or BJ’s owners.

For myself, I like to travel internationally and my primary card is the Venture Card from Capital One. It has no foreign transaction fees, it’s great when you’re overseas. It also has what’s called the travel eraser which refunds your travel expenses, air, hotel, car. That’s the card that works for me so I enjoy that if you’re into travel. Thanks Mark for the question.

If you have any money related question you would like answered, just visit Goaskscott.com to get in touch with me. You can find my email address, Twitter and you can also leave me a voicemail. Please contact me, I am here to help you.

[BREAK]

[0:10:25] ST: I want to share with you a money myth. Things people believe about money, which are not true. Today’s myth is that only rich people need a will. Now 50% of people don’t have a will but 100% of us are going to die. For some people, maybe not having a will is okay, if you’re single, you have no kids, you’re broke, you own nothing, you probably don’t need a will. But if you have kids, you better have a will, if you don’t, the state is going to decide who will be raising your kids. If you’re married, you can’t assume your spouse will get everything automatically. The laws vary state to state and you know what they say about assuming.

A will does not have to be complicated or expensive for you to do. Do not let those excuses stop you. You have a simple situation, there’s a piece of software called a will maker and you can pay $50 to use it through the website Nolo.com — N-o-l-o.com. It’s an easy guide, it walks you through setting up a will by asking you questions and you can’t beat the price, 50 bucks. Legal Zoom, they would be my second choice for you to do to have a load on it at the lowest cost.

If you’re in a situation that’s more complicated or you’ve got a business, lots of assets an extended family situation, you need to get a lawyer involved. If you don’t, things are going to get really messy when it comes time to divide up your stuff. You don’t want some unknown government employee deciding who gets what in your family or who is going to raise your kids. And you certainly don’t want all of the lawyers and attorneys charging your mourning family an arm and a leg to sort things out and having them to end up with all the money at their $500 an hour rate. Get a will in place today.

Now, back to your questions. Connie writes in to ask for any advice for saving money for single moms when there just doesn’t seem much left if any to begin with.

[0:12:12] C: “I’ve been a single mom for almost five years, get little support and want to save money, I would just love to stay motivated.”

[0:12:19] ST: Now I know someone who is in a similar situation; single mom, raising a family, mortgage, clothes for school et cetera. My first suggestion is to just find an escape for yourself. Carve out some “me time” because you need it and as a single mom, you deserve it. Me time has to be a couple of hours a week just for you without little Johnny or Sally Sue. See if you can find someone to trade babysitting duties or you watch their kids once a week and hopefully they can do the same for you. Then take some time to have some fun and relax.

Some people like to run, some people like to go to the library, I like to sit on the front porch with a hot cup of tea, whatever works for you as long as you unplug, decompress and get it on the calendar to give you something to look forward to every week. This time will help you keep your sanity and reflect on the things that are going well in your life. Go to the library and just check out books by people that are motivational speakers or listen to things on the radio or other podcasts that will motivate you.

I do that, it’s made a big influence on my life. The best motivation will come from constantly feeding your brain every day. Speaker name Zig Zigler said, “People often say that motivation doesn’t last, well neither does bathing, that’s why we recommend it daily.” These podcasts we produce always end with a high note. I’ve got to motivate you, like helping you motivates me.

As far as saving goes, automation is going to be your friend, for retirement savings, if you have access to a 401(k), just try putting in 1% of your paycheck, one penny of every dollar. If you don’t have a 401(k), you can start a Roth IRA for as little as $100 at Schwab or for $0 at Betterment. Their total stock market index fund gets you invested in 4,000 companies. It’s a great way to start. If you want to save up for a short term goal, Ally is an online savings bank, that’s a great choice.

Again, for each of this, automate your savings so you never see the money, that’s a great way to slowly build wealth up overtime, thanks for the question Connie.

Todd writes in:

[0:14:17] T: “I am interested in the benefits of owning your own company from a tax and expense view point as in, you can write off a company car, you can somehow structure it so your residence is a business expense, et cetera.”

[0:14:29] ST: Now, if you use part of your home for business, you may be able to deduct expenses for the business use of your home, this can include your mortgage, interest, your insurance, utilities, repairs, depreciation. It’s never the case, you can deduct your entire home, I’ve had a home office deduction on my past three homes. It’s not a significant amount of savings but every bit helps, it’s better than paying it to the tax man.

To figure out the appropriate amounts, you need to keep all of your utility bills throughout the year, all of your mortgage expenses. Any type of relevant home repair like pest control, an HVAC services, those are okay. Painting a bedroom, not going to cut it unless your bedroom is actually your home office. If you use your car on your business, you can deduct car expenses. If you use your car for both business and personal use, you have to divide your expenses based on your actual mileage. Good records, they’re going to be important when you’re doing that.

Leasing cars is a terrible financial decision. Leasing a car for business purposes just to get the tax deduction doesn’t make any sense either, thanks for the question Todd.

Cory and his wife are trying to find a balance in their lives:

[0:15:33] C: “We both work a lot in our careers, we have two kids who do a lot of after school activities and on the weekends. My wife travels a lot for her job and sometimes we can’t make it to the baseball games or the dance recitals. We struggle to find a good work life balance.”

[0:15:47] ST: People who work a lot feel like their life is out of balance or spouse is a people who work a lot, feel like their partner’s life needs more balance and that’s a myth. There is no such thing as work life balance. When you talk about balance, what do you picture? It’s a scale with two sides. You got to wait to one side, the other side goes up. You got to wait to the other side and it starts to balance out.

Now when it comes to working, the only measurement you have to compare is time. In between commuting and working 40 to 50 hours a week or more, you will never have balance, work always wins the balance of the scales when it comes to time. What does that mean? We’re comparing the wrong thing. We shouldn’t even be comparing at all, we should be looking at two things; the quality of life and your focus of your time.

I work a ton and I always have and I probably always will because I’m wired to keep busy but I feel like I have a high quality of life most of the time. And if my wife expresses I’m not meeting her needs or she is not meeting my needs, then we figure out ways to address that to improve the quality of our lives because if the wife ain’t happy, ain’t nobody happy. Cost from not taking care of your children and family are going to become pretty apparent. And by taking care of them, I mean, being present in the moment with them or the opposite which is never seeing and spending time with them.

That’s what part of the focus comes in. Put the phone down during dinner, turn off the TV, have a conversation, otherwise the kids will start acting out, getting into trouble, giving mom a hard time, you wife is going to start acting out, getting into trouble, giving you a hard time. Now those are the things we can measure to see both of you and your wife are satisfied in the various areas of your lives. And you have to remember, work is required to have a life, we must work to eat. So embrace that you’ll be working and make sure you’re doing something you enjoy doing. That joy will overflow into the other areas of your life like being with your family.

Now let’s get down to the practical side of things, and that’s carving up your schedule to have some focus time with either your friends or your family. Both my wife and I, we have our days divided up in hours and those hours are chunked up into blocks of time were we focus on one thing; work, exercise, free time, family, cooking, shopping, et cetera. and we start with that as a foundation and every week you will have interruptions and unexpected events. And that’s fine, we call that life.

Some evenings, the schedule changes and you go out to dinner. Some afternoons we might not work and go out mystery shopping for a free lunch at a restaurant, some days a kid gets sick and they’re home all day but overall we have most of our days planned out with big chunks of time for the important parts of our life. It’s not balanced, it’s striving for quality and that’s what’s important. You feel you have a lack in an area of your life, look at where you’re spending your time and make adjustments, do that and you’ll lead a much more satisfying life.

Strive to have quality and focus in areas of your life that are most important to you. Spend less time and less focus on the things that are less important. We spend a lot of our days and weeks wasting a lot of time on unimportant stuff. But you can clarify of a top couple three things that are important to you, you direct your attention to those things and you learn to protect that time from the other stuff going on around you. Thanks Cory for the question.

[0:19:10] ST: Okay, quick break, back in 30 seconds, I’ll be answering more of your questions, you’re listening to the Scott Alan Turner show.

[BREAK]

[0:19:17] ST: Hey Rock Star Nation, Scott Alan Turner here for Ben & Jerry’s ice cream. Now folks, for those of you that are my long time listeners, you know I’m not one of those guys in the radio who promotes every product that shows up on their desk. You’re never going to hear me try to get you to buy Tempur-Pedic mattress because Novaform from Costco is way better and cheaper, Or recommending you to buy New York Style pizza when Lou Malnati’s in Chicago is clearly the best.

Now I have a name to uphold to you, my Rock Star listeners but if I were, if I were to recommend something to you, I will tell you about Ben & Jerry’s Boom Chocolatta Cookie Core ice cream, mocha and caramel ice-cream with chocolate cookies, fudge flakes and a chocolate cookie core. It’s delicious and nutritious. Not really. Find it in the freezer section of your favorite grocery store but not from CVS or Walgreens because they don’t carry all the awesome flavors and ice cream is usually $2 more expensive than Walmart. Tell them Scott Alan Turner sent you.

[CONTINUED]

[0:20:12] ST: Welcome back everyone! Pam writes:

[0:20:15] P: “We are pretty new to budgeting. We make plenty of money and we spend plenty too. Giving up the instant gratification of buying what we want when we want it seems to be our biggest hurdle right now.”

[0:20:27] ST: So our entire society wants instant gratification and it’s a constant fight but where you will find much greater gratification more than the instant kind is following your spending plan and saving up our purchases. Now there’s nothing wrong with spending plenty of money as long as it aligns with the short and long term goals. Where many people fall short is not having written goals on what they want to accomplish.

Now a goal can be anything from wanting a new set of golf clubs to living on a golf course when you retire. Well write it down, put a date next to it, track it how you’re going to get there and how close you are to that goal and when it’s going to be accomplished. A goal that isn’t written down is just a wish. Your budget is just a means to accomplish your goals. It’s like the blue print to getting the house built on schedule as desired without overspending. It makes you sure you have a solid foundation, the walls are square, the roof isn’t going to cave in, the doors aren’t crooked, et cetera.

To get the results you want, you have to plan exactly what to do with the dollar of your income. Then when the situation arises, maybe it’s a meal out that will break your plan, maybe it’s a new shirt that will break your plan, then you’ll make more conscious spending choices. You’ll pick up the shirt and say, “I can buy this or I can charge this but is my vacation more important or is that new car we’re saving for more important?” The instant gratification cycle will start to break down.

And there will be times when you just drop your hands and say, “Screw it, I’m getting it anyway,” anyone who’s tried to diet knows this, you eat the entire pizza hut pizza then you feel terrible. At least with a T shirt you can bring it back the next day and return it. Hard to return a pizza. Your goals will serve as your motivation to say no to instant gratification. Reviewing them daily or at least weekly will help keep you on track. When you do so, and save up for something that’s important, you’ll place a much greater value on it because of the sacrifice it took to purchase. If it were food, it would taste that much sweeter. Thanks Pam for the question.

I have a question for you listeners, what would your life look like if you had more money than you knew what to do with? What are the benefits you would have, what are the things you would have, what are the ways your life would be improved in every way? What would happen if you woke up in the morning and you choose to go to work because you wanted to, not because you had to, and that’s if you wanted to work at all? If you had true financial freedom every day for the rest of your life, how much better would your life be, if money were no longer an issue in your life?

Take some time today and write all this down. Take five minutes. Five minutes and put pen to paper. Hear me on this, writing stuff down makes it more likely you will achieve what you want rather than just thinking about it and daydreaming, there is power in the pen. Make it something tangible that you can look at and refer to in the future. Maybe something you can stick on your bathroom mirror or the refrigerator.

We are all where we are today, that’s just the situation. If you’re $500,000 in debt or you have $500,000 for retirement, we’re all born at zero, 99% of us anyway, and we go up or down from there. But whether you continue to go up or continue to go down is a choice and you are going to make it this day and then you’re going to make it the next day and then you’ll make it the next day, and every day after that.

We’re almost at the end here, if you’re in a spot where you can write do it now. Successful people know the power of writing stuff down and reviewing it every so often. And I want you to be successful otherwise I wouldn’t waste my time asking you to do this, write it down and give your mind a target to aim for. Those are the words. Next time I’m going to tell you the number one mistake that people make when buying a car. You don’t want to miss it.

That’s it for this episode, I’m your host, Scott Alan Turner, Rock Star Katie is my producer, all the links mentioned in the show are available in the show notes and ScottAlanTurner.com. Today’s episode is powered by, of course Ben & Jerrys ice cream. We won’t quite until we get a flavor named after the show or at least some coupons to give away. Thanks for listening.

[FINAL MESSAGE]

[0:24:34] ANNOUNCER: You’re not alone on your journey to live a financial rock star life. That’s why we put together a free eBook just for you. Go to financialrockstar.club to receive your free guide on how to save $1,000 in one week and start getting out of debt, saving more money and retiring early. See you next time.

[END]
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